A Seattle-based company that has built and is operating 13 hospitals in Asia is poised to grow by 18 more in Malaysia, India and Vietnam by the end of 2011, and it could serve as inspiration across the United States on how to do more with less.
Information technology systems, built in-house, have played a critical role in the company’s success, says Rick Evans who founded Columbia Asia with fellow entrepreneur Daniel Baty.
Evans describes their model as no frills. The facilities are small – about 90 beds – and basic – no marble foyers, and no heart surgery. They cater to the growing middle class, operate at nearly 100 percent occupancy, and deliver more than 20 percent return to investors, according to Evans. They are efficient, and their fully integrated electronic health record contributes to that efficiency.
“We decided about six years ago to develop our own operating systems,” Evans said. “We did it entirely in Malaysia and in India.” Evans said Columbia Asia has invested $7 million dollars in development, but the system works in all their hospitals.
“So, for each new hospital that we open, the marginal cost for the software is next to nothing,” he said. There are training costs, he added. But the would be the case regardless of the system.
Harvard healthcare economist David M. Cutler has advocated for the use of healthcare IT for many years in the United States. After his book “Your Money or Your Life: Strong Medicine for America’s Health Care System” was published in 2004, Cutler said, “Medical care is the most information-intensive industry in the economy, but it uses information technology the least. That is very distressing.”
As Columbia Asia grows, the IT savings will multiply, Evans said. “We do not have to buy or pay for a license from an outside system. As we add hospitals over time this will provide a huge savings to our company,” he said.
Evans said more than 90 percent of the hospital software was developed in-house, the rest with help from vendors in Malaysia and India – Asiankom, K-2 and Mphasis. The IT includes an EMR, a back office accounting system and a hospital operating system that includes laboratory and radiology modules.
Efficiency has not come at the cost of patient care, Evans notes.
“The IT systems improve care primarily due to the resulting clarity in communication that comes from their use,” he said. “The systems also give us immediate access to a patient’s medical records. So, in the event of an emergency, for example, we know the person’s blood type and other critical medical facts. No one has to go looking for an old file, and no one has to try to try to interpret what was written by hand in an old medical record.”
Columbia Asia is the operating arm of Columbia Pacific, an investment firm mainly owned by the Baty family.
Baty, who rarely grants interviews, was quoted in the Puget Sound Business Journal earlier this year as saying that Columbia Asia hospitals break even in eight to 15 months after opening. Hospitals more than two years old, he said, “are hitting all our profit targets.”
Whether the model that Baty and Evans are employing in India could apply in some fashion in the United States remains uncertain. Evans said Columbia Asia looked to Asia to escape the over-regulation and medical lobby in the United States.
